Revisions to data

April 30, 2012
Readers of OGJ's US Industry Scoreboard may have noticed a recent addition to that table.

Readers of OGJ's US Industry Scoreboard may have noticed a recent addition to that table. At the suggestion of a long-time reader, the line disclosing US net product imports has been added, starting with the Apr. 16 issue.

Figures from the US Energy Information Administration show that recently, the US became a net exporter of oil products, mostly gasoline and distillate, as gross exports of products exceeded gross imports of the same. While gasoline demand has weakened since 2009, year-on-year comparisons have been skewed, as EIA was underestimating US exports.

Distorted comparisons

Last month, EIA posted on its web site as follows:

"EIA's Weekly Petroleum Status Report (WPSR) collects weekly data on crude oil and product imports, stocks of crude and product, and refinery runs, but it does not collect data on product exports, which also affect weekly balances and estimates of ‘product supplied.' Last August, EIA implemented a new methodology to improve the accuracy of the weekly gasoline export estimates. Consideration of the new export methodology substantially reduces the estimated decline in gasoline product supplied between January 2011 and January 2012."

EIA does not collect petroleum product export data on a weekly basis, but instead relies on a model-based estimate using monthly data from the US Census Bureau. Historically, US petroleum product exports have been relatively low compared to domestic consumption. From the mid-1990s through 2009, US exports of gasoline rarely exceeded 200,000 b/d and varied little from month to month, EIA said. However, driven by changes in markets and refining economics, US gasoline exports began rising in 2010, and the upward trend continued into 2011.

New methodology

EIA noted that after observing this phenomenon over several months, it decided to revamp its methodology. EIA identified that the WPSR's model-based gasoline export estimate, which used 5 years of monthly historical volumes and prices, needed revising to better reflect current export-market trends. For example, the WPSR's previous model-based 4-week average gasoline-export estimate for January 2011 was only 191,000 b/d, well below the 414,000 b/d of gasoline exports reported by the Census Bureau and published in EIA's Petroleum Supply Monthly (PSM) in March 2011.

In August 2011, the WPSR began to use the latest-available gasoline exports published in the PSM as the basis of its weekly gasoline export estimates, having determined it to be a better estimator. Because of this change in methodology, it is important that current comparisons to year-ago weekly gasoline demand, say for January 2011, account for the fact that actual exports at that time were later determined to have been 223,000 b/d higher than the previous WPSR January 2011 estimate, thereby lowering January 2011 weekly gasoline demand estimates by that same amount. While the new weekly gasoline export numbers are still estimates, the new methodology should provide a closer match with the final monthly data, EIA said.

A key reason for EIA to improve the estimate of exports in the weekly data is that exports are subtracted to calculate domestic product supplied, which is used as a proxy for consumption. If exports are understated in the weekly data, then the product supplied estimates will be overstated by a similar amount.

In January 2011, the initial gasoline export estimate in the WPSR was more than 200,000 b/d less than the more-accurate export volumes later reported in the PSM, according to EIA. Without accounting for the new export-estimate methodology in the WPSR, readers might conclude, for example, that US gasoline demand in January 2012 declined by about 7% from January 2011. However, accounting just for EIA's new weekly gasoline export model adopted last August would adjust the WPSR-based year-ago comparisons of January 2012 gasoline demand to show a 4.3% decline. And if estimates of exports are now overstated, the year-ago comparison would reflect an even smaller decline, EIA said.

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